In a recent Harris Poll on who Americans have confidence in, small businesses came in second only to the military. At the bottom of the confidence list were the press, major companies, organized labor, Congress, and law firms.
Maybe You Don’t Need Money for Your Business
Many entrepreneurs seem to believe that the primary objective of their business is to raise investment capital. This is the wrong mentality to have in any start-up, as your focus should be on building a sustainable business. I tell my students in our Entrepreneurial Financial Management class that my primary goal is to teach them how to start a business that needs as little outside money as possible through careful cash flow management, realistic forecasting, and bootstrapping.
Seth Godin (author of Bootstrappers Bible) strongly agrees in this post at Impact Lab from last Friday.
If you fund your company, even a little, you’ve just sold it. Maybe not today, or tomorrow, but one day. That’s http://laparkan.com/buy-sildenafil/ because rational investors are funding your company in the expectation that you are going to sell it and make them a profit. (sure there are exceptions, but not many). So, if you don’t expect that your company will be easy to sell for a big profit, or you don’t ever want to sell your company, it’s not a smart idea to raise money for it….[I]f you absolutely need a lot of money to do a particular business and the terms you’ll need to accept to get that money are unacceptable, find a new business. Nothing wrong with that. The market might be trying to tell you something.
Internet as a Tool for Due Diligence
Entering into business relationships can be tricky. The Internet proves to be a great tool to gain information that can help inform possible business deals. Public Records Blog offers some advice:
By conducting simple due diligence and developing your own profile on any person or business you will have a much better understanding of a particular business and its associates which is vital to your business decisions. 90% of the information you need to know can be found on-line. You just have to know where to look for it, and how to look for it.
The post offers several specific tips on tools to use to search for information.
Carnival of Entrepreneurship!
Welcome to the Carnival of Entrepreneurship! Those of you who are regular visitors to my site are familiar with Carnival of the Capitalists. This is a similar project, but this travelling collection focuses just on Entrepreneurship. Each week we pick seven (7) posts, often from sites that you may not have visited before. If you are interested in submitting posts and/or hosting this Carnival in the future, please visit About Entrepreneurs for more information. Thanks to all of you for the great submissions! As always it was hard to pick only seven.
Marketing and Business Relationships
Chris at Adventures in Capitalism lasted longer than I did watching American Inventor. He was reminded in the first episode about the importance of creating real value when introducing a new product or a new service. The “cool” factor is not enough to sustain a new venture over the long-term. You need to think like your customers and truly provide something they need. If it does not create real value to its intended customers, a new business will not have the legs to last.
One was to prove that you offer your customers real value is by letting current customers tell them. Testimonials can be a powerful marketing tool for small businesses trying to demonstrate to the market that they are legitimate and effective player in the market. Small Biz Survival offers an excellent summary of why and how to use testimonials. Even a fairly new business can build testimonials if it provides what the customers really want. Don’t be afraid to ask!
One critical skill that many people overlook when preparing to launch a new business is selling. As much as you’d like to think it will, very few products or services will “sell themselves.” The entrepreneur has to learn to sell not only to new customers, but to prospective investors, lenders, employees, landlords, suppliers, and so forth. David offers his thoughts on how to be more effective at selling at Career Intensity. His main point is to be yourself!
I was reminded of one of my favorite chapter titles from You Have to Be a Little Crazy by Barry Moltz is “Networking is not a Verb” when I read this post from Brain Food Blog. It is an interview by David Teten with Pamela Walker Laird about the power of strategic relationship building (a.k.a. networking with a purpose in mind).
It is amazing to me how little civility there is today in business. Common courtesy is not so common any more. Jason reflects on all of this at A Thought Over Coffee. What people fail to recognize is how inconsiderate behavior toward potential customers ruins so many chances to build their business. Returning phone calls, being honest, building a real relationship are all critically important marketing tools. The good news it that those who are considerate and polite will stand out from the crowd.
Financial Management
The whole idea of budgeting can be overwhelming for a new business. Creating and monitoring a budget can take time and energy away from what you need to do to bring business in the door. Many entrepreneurs fail to keep up with a traditional line item budget from month to month. After all, many of us are our own bookkeepers when we first get started. Firevalt offers a simple approach to get you started on budgeting that gets you to focus on what is really important when your business is getting started: getting to positive cash flow each month.
So why do we need to keep track of our numbers? Michael at Marketing and Entrepreneurship offers a lesson he learned from working out and getting in shape. As he learned in the gym, what gets measured gets improved. Powerful words for any growing business!
Immigrants Can Fuel Entrepreneurship
Immigration is fast becoming a major political issue in the US. And while illegal immigration is a valid concern, we need to be cautious not to restrict legal immigration during the current entrepreneurial economic boom. The latest evidence of the positive economic impact of controlled immigration can be seen in the large number of Hispanic entrepreneurs starting businesses across the country.
From the Tennessean:
Hispanics owned nearly 1.6 million businesses in 2002, a 31% increase from five years earlier, according to a report yesterday by the Census Bureau. The number of all U.S. companies grew by 10%, to about 23 million, during the same period.
It is inspiring to see so many new people coming into this country and embracing our system of free enterprise. They come here to add to our national wealth. But, illegal immigration at the level we now are experiencing can only hurt these entrepreneurs. It fuels animosity from the general population and can even unfairly casts doubts over the legitimacy of these small business owners. Getting control over immigration will be a benefit for Hispanics who are trying to legitimately become a part of the American economy.
I believe that now is not the time to restrict the flow of new people into this country. Quite the contrary. We are in the early stages of a new economic era we have not seen the likes of in this country in over 100 years. The last great entrepreneurial economic boom was created in large part by first generation Americans and sustained by a large, but controlled, wave of immigration that helped to build an economy that last through most of the 1900s.
However, if we want immigration to be a positive contributor to this new era it must be managed properly. We have lost control of our borders and this threatens both our economic health and our national security.
CotC
Carnival of the Capitalists is up at CaseySoftware.com.
I will be hosting Carnival of Entrepreneurship later this week, which this week can be found at Business Opportunities.
Filling a Niche
Tick Marks blogged about a great article at Accounting Web that clearly spells out five strategies that help a new professional service or consulting business take advantage of a niche market quickly and effectively. It actually has good insights for anyone looking to start a new business in a niche market.
Here are their five strategies for niche markets and my thoughts on each:
“Strategy One: Aim at one and only one niche at a time.”
For years I have had a rather corny poster on my wall that has a picture of a golf hole that is one of those intimidating island greens. It has one word at the bottom: Focus. I have thought about putting it away each time I move into a new office, but time and time again I find that its message is important to reinforce with new entrepreneurs. Too often they forget the importance of keeping their eye on the competitive advantage of the niche they have discovered.
“Strategy Two: Craft a ‘dynamite and irresistible’ marketing message”
The best niche markets are those that have not yet been satisfied. Therefore, don’t forget to get the word out to your customers that you are open and ready for business. Your message should tell them who you are, why you are worth their attention, and how you will take care of their needs. Find inexpensive, but effective ways to get in front of your market. Become a marketing bootstrapper.
“Strategy Three: Become the ‘obvious expert’ in your niche”
The key to this strategy is having a clear and compelling mission statement that has an obvious focus. The answer to the question “Tell me what you do,” should take you no more than 15 seconds. You want your customers to become your sales force. You want them to say to others, “When I had the problem, I called __________.”
“Strategy Four: Create a ‘hit list’ of your most desired 100 clients in your niche”
Your marketing plan should have you going for the low hanging fruit. Find the customers that need you the most and have the best chance of paying for what you offer.
“Strategy Five: Implement auto-pilot referral systems”
Word of mouth does not just happen. Make your customers want to refer clients because it makes them look good to do so. Find a simple and meaningful way to say thanks. It may have some monetary value, or may not. Hand written notes have become so uncommon that when you send one, it really can mean something to your customers.
Is Globalization No Longer a Dirty Word?
Globalization has become synonymous with unchecked corporate and political power that hurts average citizens around the world. But in a speech this past week to the World Summit of Young Entrepreneurs, Abdel Hamid Mamdouh, director of Trade at the Services Division of the World Trade Organization (WTO), offers a very different view when globalization is viewed in terms of the emerging entrepreneurial economy.
From the Brazil-Arab News Agency:
According to Mamdouh, the WTO sent him to the meeting as their representative due to the theme, which is the liberalization of trade and is of great interest to the organization. To him the objective “is to liberalise trade as it is newly defined, to encompass movement of capital and movement of people, to liberalise it through agreements between governments, in order to open up new investment opportunities for entrepreneurs, to open their horizons.”
Mamdouh called globalization one of the great facilitators of entrepreneurial activity in today’s economy.
Mamdouh stated that the current generation of entrepreneurs is the best that the world has ever seen. “IT and technology have greatly helped entrepreneurs supplying them with tools that did not exist in the past, providing them with information about markets that were not available for previous entrepreneurs. Their work is simplified by market globalisation and by the reduction of barriers between countries,” stated the Egyptian.
P.R. Lessons from the Bruins
Today is a big day here at our little University. For the first time ever, our men’s basketball team is in the NCAA.
GO BELMONT BRUINS!!
It is a good lesson of the power of publicity. If a small school is able to gain the kind of publicity Belmont has gotten over the past week, amazing things happen. See this piece that was front page on USA Today on the 14th as a example. (My students tell me we are getting a news piece somewhere every thirty minutes over the past two days).
Entrepreneurs can also become masters of their own P.R. and this can be a powerful way to get the word out about a business.
Learn how to write a press release and how to use it effectively:
– Be consistent and focused in your message and who you target with that message
– Do your homework on what media like what kinds of stories. Many have business sections that are constantly looking for good stories.
– Include cover letter (e-mail) or relevant article to explain why your story about your business is interesting or trendy.
– Build relationships with local reporters so they get to know you and your business. You can expect multiple stories if you do this well.
– Create your own angle for them for the story.
– Send to newspapers, magazines, radio, television that have an interest in your local market or in you product.
– Follow-up with phone call to see if they have any questions. This is sometimes where the interest gets momentum.
– Be persistent and don’t be afraid to break the rules.
– Quality counts, so write it well and write it like a real news story.
Alumnus Blogger
One of our MBA alums from here at Belmont, Charles Hagood, has set up a blog for his newest business venture Healthcare Performance Partners. It is a great example of how a blog can be used to keep connected with customers. Lean Healthcare Exchange is the name of the site. It offers a good model for those of you thinking about using blogging as a tool for your business.
Here are a few tips to help make sure an investment in time and money is worth it for your business:
– Provide meaningful and useful content. This cannot just be a billboard for your business. Blogs are best when they are forums for discussion.
– Keep it current. Take it from me, blogging on a regular basis can become a bit of a drag some days. But your readers are looking for regular new posts, so be ready to blog at least a couple of times a week if not daily.
– Make it look professional. Although there are cheaper ways to set up a blog, spend a little money to make it look good and function properly. People will not stay long nor come back to a cheap looking site.
– Keep up with maintenance. Spam is real, and you need to monitor and set up systems to keep in under control.
– Break a few rules. This is blogging, so it should be fun and a little more informal. Blogging is one big conversation.